Asia benzene fell $1/mt from September 22 to $629/mt FOB Korea September 23 amid lower discussions heard.
Buying interest was stable in the week to Friday with several fixed price and floating deals heard. A December deal was also heard at $624/mt FOB Korea Friday.
In China, discussion levels were unchanged from Thursday with an October bid heard at $640/mt CFR China. The CFR China marker was assessed at $644/mt, unchanged day on day.
Meanwhile, a 3,000 mt cargo from Japan had arrived in east China, a market source said, but this could not be confirmed.
Analysis continues below...
The Asia-US arbitrage remains open with the FOB Korea-US spread at $68/mt, based on an FOB Korea price of $629/mt and a US October price of $697/mt FOB USG.
Downstream styrene monomer was assessed at $981.50/mt FOB Korea, down $9/mt day on day.
ICE November Brent crude futures fell 11 cents/b to $47.10/b at 0830 GMT, close of Asian trade Friday.
The European spot price of benzene for 5-30 days forward loading was assessed at $670.50/mt CIF ARA, down $3/mt on the day. On the week, the benzene spot price shed $7/mt.
The European spot market remained largely rangebound throughout last week, as supply and demand found more balance and the September-October market structure nearly flattened out as premiums for prompt material came under pressure.
The September-October backwardation was assessed at $1.50/mt on September 23, compared to $7/mt at the end of the previous week.
“Europe is starting to realize that there’s plenty around and demand is just OK, not great,” noted one trader mid-week.
Prices started off the week on a bearish note, but recovered as the week went on in line with an overall rise in the oil complex.
An October deal was reported on Tuesday at $665/mt, but on Thursday two parcels changed hands for the same laycan at $675/mt and later on in the day at $673/mt.
On September 22, November was also heard trading at $667/mt, cementing the $3/mt backwardation between October and November.
A second trader said benzene’s premium to naphtha had narrowed considerably throughout September, incentivizing some to pick up benzene parcels.
The average benzene-naphtha spread in the third quarter was reported at $315.41/mt on Thursday, well above the typical break-even point of $250/mt which is needed to cover production costs.
Benzene supply in Europe for October was also reported to lengthen this week, as 24,000 mt of Saudi Arabian-origin material is to discharge in the ARA-region in the first half of October.
On a more bullish note for European benzene, it was reported Friday that Russian export duties on benzene, toluene and xylenes are set to rise in October, according to the ministry of economy’s website.
The duties will rise 14.7% month-on-month, but will be still down 16.4% year-on-year at $36.70/mt.
Latin benzene was assessed $19/mt lower week on week at $627-$629/mt FOB Brazil on September 23, tracking US pricing lower.
The US benzene assessment fell 6 cents/gal on the week at 231 cents/gal FOB USG for the prompt month amid weaker sentiment because of a high amount of imports from Asia in October, sources said.
The dip in Latin benzene pricing marks a $47/mt decline since the flat assessment September 2, according to S&P Global Platts data.
In energy, front-month NYMEX crude settled $1.45 higher week on week at $44.48/b, while the ICE Brent front-month contract gained 12 cents over the same period to settle at $45.89/b.
Front-month NYMEX RBOB settled at 137.69 cents/gal, a week-on-week drop of 8.47 cents.
US spot benzene for September was down 6 cents on an FOB basis on the week, assessed at 231 cents/gal, and down 5 cents on a DDP basis to be assessed at the same level.
October assessments were 6 cents cheaper on an FOB basis last week at 230 cents/gal and 5 cents lower on a DDP basis at 228 cents/gal. On the day, all assessments were down 3 cents because of energy declines.
Fundamentals were steady last week, however sentiment weakened because of expected imports from Asia, sources said.
An influx of benzene from Asia, more than 120,000 metric tons, were expected to arrive in October amid quiet derivative demand, sources said.
In energy, front-month NYMEX crude settled $1.45 higher week on week at $44.48/b, putting the benzene-to-crude ratio for WTI at 2.18.
The ICE Brent front-month contract gained 12 cents over the same period to settle at $45.89/b, putting the benzene-to-crude ratio for Brent at 2.11.
The benzene-to-RBOB spread was 93.31 cents/gal as front-month NYMEX RBOB settled at 137.69 cents/gal, a week-on-week drop of 8.47 cents.
Arbitrage opportunities for Asian shipments to the US were mostly open on paper this week, according to S&P Global Platts data. The FOB Korea-US spread was $59/mt Friday, based on an FOB Korea price of $629/mt and a US October price of $688/mt FOB USG.
The Europe-US arbitrage spread was around $16/mt, based on September pricing at $672/mt FOB Rotterdam. The US-Europe arbitrage was closed, with the spread around minus $21/mt, based on October pricing at $670/mt CIF ARA and a US September price of $691/mt.
In derivative markets, spot styrene for September was assessed down 1 cent at 42.75 cents/lb FOB USG, and October was assessed at 42.50 cents/lb FOB USG, also down 1 cent, on weaker Asian styrene spot pricing.
An October deal was done September 22 at $945/mt (42.85 cents/lb), with the market talked lower September 23, sources said.
In the phenol market, the weekly US spot export assessment was $865-$887/mt (39.25-39.75 cents/lb) FOB USG on Tuesday, while the domestic phenol assessment was $998-$1,020/mt (45.25-45.75 cents/lb) FOB USG ex-tank.
The September US benzene contract price settled at a 245-251 cents/gal ($733-$751/mt) split, up 16-23 cents from August, sources said.
Toluene commentary: rbitrage from NWE to US becomes marginal; disproportionation economics in US attractive